Topic 2: Management, Leadership and Decision Making

Question 1

What is the difference between a manager and a leader?

Answer 1

• Managers tell people what to do and they organise resources to get the job done.
• Leaders motivate people and inspire them to do things.

Question 2

What are the main responsibilities of a manager?

Answer 2

• Set objectives
• Analyse and interpret data
• Make decisions
• Review of their decisions
• Lead their staff

Question 3

What is meant by an autocratic leadership style?

Answer 3

Manager makes decisions on their own.

• Useful in a crisis, or with unskilled workers.
• Can demotivate able and intelligent workers.

Question 4

What is meant by a paternalistic leadership style?

Answer 4

Softer form of autocratic style

- Consults the workers, explains the decisions and persuades staff

Question 5

What is meant by democratic leadership style?

Answer 5

Leader encourages workforce to participate in decision making process.

• Discusses issues with workers, delegates responsibility and listens to advice.
• Leaders have confidence in their workers, which makes them motivated.

Question 6

What is meant by laissez-faire?

Answer 6

A weak form of leadership

• Leaders offer employees support but rarely interfere in the running of the business
• Only appropriate for small team of highly motivated, able workers.

Question 7

What internal factors may cause a manager to change leadership style?

Answer 7

• Urgent tasks e.g unexpected large order may require autocratic leader to tell everyone what to do.
• Large, unskilled workforce requires autocratic leader, small educated workforce suits a democratic leader.

Question 8

What external factors may cause a manager to change leadership style?

Answer 8

• During economic hardship, a strong leader is needed to issue clear, quick demands.
• Democratic leaders may be more necessary in times of success, to communicate with employees.

Question 9

Which grids can be used to assess management style?

Answer 9

1) Tannenbaum Schmidt Continuum

2) Blake Mouton Grid

Question 10

What does the Tannenbaum Schmidt Continuum assess?

Answer 10

Places managers on a scale from autocratic management through increasing levels of participation in decision making.

Question 11

What are the management styles identified by the Tannenbaum Schmidt Continuum?

Answer 11

1) Tells - autocratic
2) Sells - mostly autocratic but allows questions
3) Suggests - decision is discussed, opinions considered
4) Consults - decision is discussed and modified
5) Joins - workforce make solutions, manager decides
6) Delegates - team discusses and decides
7) Abdicates - team define and solve the problem.

Question 12

What does the Blake Mouton Grid assess?

Answer 12

How much managers care for their employees and how much they care for production

Question 13

What are the leadership styles identified by the Blake Mouton Grid?

Answer 13

1) Impoverished - low concern for people and low concern for production.
2) Produce-or-Perish - high concern for production, low concern for people
3) Country Club - high concern for people, low concern for production
4) Middle of the Road - average concern for people, average concern for production
5) Team - high concern for people, high concern for production

Question 14

What is scientific decision making?

Answer 14

Decisions are made scientifically based on data and their outcomes are compared to the initial objectives.

Question 15

What is intuitive decision making?

Answer 15

Decisions are made based on a ‘hunch’ or a gut instinct.

Question 16

What are the advantages of scientific decision making?

Answer 16

• Reduces the risk of making expensive mistakes.

- Logical and structured

Question 17

What are the disadvantages of scientific decision making?

Answer 17

• Costly and time-consuming
• Less original and creative than intuition
• Must be unbiased and up to date.

Question 18

What are the advantages of intuitive decision making?

Answer 18

• Can be done quickly
• ## Can be used in new situations where data isn’t available.

Question 19

What are the disadvantages of intuitive decision making?

Answer 19

• Risky to rely on all the time

- Gut instinct can be irrational

Question 20

What must a manager consider before making a decision?

Answer 20

• Risk
• Reward
• Uncertainty

Question 21

Define ‘opportunity cost’

Answer 21

The cost of the next best alternative when making a decision.

Question 22

What else must a manager consider when making a decision?

Answer 22

• Mission
• Objectives
• Ethics
• External environment
• Resource constraints

Question 23

What are the advantages of decision trees?

Answer 23

• Visual representation of an outcome
• Quantitative and objective
• Accurate estimate of probabilities and benefits

Question 24

What are the disadvantages of decision trees?

Answer 24

• Ignores non-quantitative data
• Probabilities are hard to predict accurately.
• Doesn’t include a wider range of outcomes

Question 25

How would you calculate the expected value of the decision tree?

Answer 25

(Outcome 1 * probability) + (Outcome 2 * probability)

Question 26

How would you calculate the pay-off of a outcome?

Answer 26

Cost of action / probability

Question 27

How would you calculate the net gain of an action?

Answer 27

(Expected value 1 + expected value 2) - initial cost

Question 28

Who are the internal stakeholders of a business?

Answer 28

• Owners
• Shareholders
• Employees

Question 29

Who are the external stakeholders of a business?

Answer 29

• Customers
• Suppliers
• Government

Question 30

What is stakeholder mapping?

Answer 30

Stakeholder mapping helps identify how much interest in and power/influence that each stakeholder group has. Each stakeholder group is mapped to a quadrant to determine how much communication is needed and how much attention they are paid.